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What Is Going To Fuck Us First, Global Warming or Financial Crisis?
By Max | May 30, 2007
I have been doing a lot of worrying lately. It seems pretty clear that the world is headed for a major catastrophe. I don’t know how it is going to play out, but I think that either we’ll all be making a run for Canada due to global warming or devastated by financial crisis and the collapse of the dollar.
Al Gore has been all over global warming since he left office. I think its funny that I never heard too much about him being connected to the global warming movement when he was actually in office and had some power. Does that bother anyone else? He wouldn’t have had to make a movie 10 years ago. He could have just passed a law or something.
Maybe we won’t have to worry about global warming though. The international credit bubble could always burst and then none of us will have any money to spend on things like gas and SUVs. A Euro used to be worth 80 cents, now its $1.30. The price of gold has tripled since 2002. I think I am going to suggest to intel, that I be paid in gold.
Either one of those scenarios playing out seems pretty nasty. Its a long painful process like starving to death. I would much rather go out with a boom, in an instant. Here’s to cheering for the next super asteroid to hit the planet!
I can’t believe my girlfriend thinks I am negative.
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May 30th, 2007 at 7:10 pm
Financial crises. This is not going to be like the 2000 one. It will be like the 1929 one.
Some preliminary data suggests that May will be at least as bad as April for retailers. Most homes have lost value and people can’t borrow against equity that doesn’t exist. Revolving credit is on the rise, suggesting that people are borrowing just to scrape by. GDP was the worst in 4 years. The jobs numbers are inflated by the computer generated birth/death rate. etc. etc. etc. The bad data keeps coming.
I have a little plan. I’m going to keep my money in cash. If the market remains irrational until July, I’m going to pick up a nice size piece of QID.
You should read hussmanfunds.com. Dr. Hussman has an interesting opening where he talks about how stupid the bulls are right now.
May 30th, 2007 at 11:06 pm
What is QID?
Is cash a decent vehicle for bad financial times? Did you see China dropped 6.5% today?
May 31st, 2007 at 5:48 pm
Cash is usually a decent vehicle for bad financial times. Unfortunately, it has never happened that a country has sustained trade deficits for so long. Suddenly cash looks grim too (at least the U.S. Dollar kind). I wrote recently about Warren Buffett making a huge currency bet (he says we’ll find out which currency next year in his report). I wonder if he’s worried about a crash and the vulnerability of the dollar and looking at a foreign currency as a parkinig place while this storm blows over???
QID is an ultrashort of the nasdaq. It behaves 200% inverse to the nasdaq 100 index. I think that a recession is coming and the nasdaq, being the most overvalued of the U.S. indices (especially the nasdaq 100 with its rich P/Es).
My plan is to wait until July. If the market continues to detach from fundamentals (i.e. climb), I’ll start a position in QID and continue building on the way up.
For crying out loud, the preliminary estimate (i.e. the first revision of the advance estimate) for GDP was revised downward to .6% annualized. The 1.3% was the worst in 4 years and it was optimistic. Yet, the Nasdaq climbed today.
I hope it continues to climb so it has further to fall when I have built my position.
June 1st, 2007 at 9:50 pm
You guys think too much.